Your column in the December 6
NYPost, “The Coming Plague: Globalist RX has destroyed our
immunity to ‘Asian flu’,” repeats many of your anxieties about our rush
to “bail out” Mexico during its peso crisis. Please recall that you and I were
shoulder-to-shoulder on Mexico, as you argued we should not commit U.S.
taxpayer funds to a problem of Mexico’s own making and I argued we should not
commit U.S. taxpayer funds to a problem in Mexico that our government helped
inspire, and which the Mexican government could better handle by itself. In
your column Saturday, you argue again that we should not be bailing out the
Asian economies and again I agree, but this time you make a new argument with
which I completely disagree: “The Global Economy is a fiction; it does not
exist. There is a U.S. economy that is strong, a Japanese economy that is
stagnant, and Asian economies in various states of crisis. And as each nation
tries to pull its own oxen out of the ditch, we will soon appreciate how each
looks out for its own interests first, last and always.”

If you would only spend a little time
exchanging views with me, you would have much stronger arguments for
objectives we both share. As long as you sound as if your are a pure
“nationalist,” by which I mean dog-eat-dog, every-nation-for-itself, you will
overlook the many times when it really is in our national interest to assist a
trading partner and against our national interest to assume it caused its own
problems, so to hell with it. A good many problems in the world are the result
of narrow commercial interests in the United States using their political
power here to extract gains from small countries that are dealing with us in
good faith. Power corrupts and the United States is now the supreme power,
which invites supreme corruption.

The Global Economy is not a fiction, but
it is nothing new. In the mid-19th century, Karl Marx observed the imperial
powers at work in the global economy and noted how commerce is interwoven to
the point where an action anywhere has consequences everywhere else. It all
moved in slow motion back then, compared to modern telecommunications, but the
actions and reactions were almost certainly the same as they are today. The
British were then the global superpower and the British did use their power to
benefit themselves first and foremost, manipulating their colonies in a way
that kept them constantly in debt, always behind the 8-ball. India has not
recovered from the experience to this day.

In that relative sense, your nationalism
is superior to the commercial imperialism the United States is now trying
crudely to practice, emulating the Brits and in many ways still guided by the
Brits. The most important element in the globalism of today’s economy is the
U.S. dollar, the planet’s dominant monetary unit. After the Mexico peso
crisis, Pat, you may remember that Alan Greenspan told the Senate Banking
Committee that the crisis would not have occurred had we been on a gold
standard. By that he meant the assault on the peso by the speculators through
their agents in the international banks would have run into a dollar-gold-peso
link that would have enabled the Mexican central bank to easily beat off
attacks on the peso. As it was, because the speculators had allies inside the
Mexican government who were eager to see a devaluation -- including Guillermo
Ortiz, the current finance minister -- the Bank of Mexico’s hands were tied.
The answer was not an IMF bailout, which has tied Mexico’s hands further
still, but a U.S. helping hand through our Exchange Stabilization Fund -- a
nice idea I sold to Bob Dole and his “Mr. Mexico,” Sen. Bob Bennett of
Utah. The idea was to assist Mexico only if the Bank of Mexico could be
freed from the constraints of Ortiz and his pals at the IMF and U.S.
Treasury. If the Mexican central bank could have sold peso bonds from its
portfolio into its banking system, it could have revalued the peso back to 3.5
to the dollar instead of the 7, now 8, that has caused the country’s
impoverishment and turned its trade account to surplus from deficit.

In that instance, the U.S. dollar was
stable, so we could not pin any blame on Greenspan. In the current situation,
Greenspan has driven down the U.S. dollar price of gold by $100 in only 13
months, to $285 from $385. For the supreme power’s supreme central banker to
allow this to happen -- by keeping interest rates high to stave off economic
growth -- is an irresponsible international act that is not in the world
interest or in ours. The Greenspan deflation has wrecked poor emerging market
economies throughout Asia and Latin America, whether or not they were tying
their currencies to the dollar, as Thailand had been, or were trying to
protect themselves from our deflation by gradual devaluation, as South Korea
was. The dollar is so powerful as the international monetary unit -- gold and
oil are everywhere priced in dollars -- that billions of people can be further
impoverished by the crook of Alan Greenspan’s little finger. One thing we can
say about the Brits when they ran their empire: they kept the pound sterling
as good as gold, and thus provided a monetary umbrella to everyone who sought
its relief. Britain did this for its own national self-interest, not to
benefit the colonies, I can assure you. This is why it is so critical for you
to understand that the Establishment forces we are both still fighting are not
going to be brought to heel unless we do fix the dollar/gold rate. We
essentially do it for ourselves, Pat, to prevent the big guys who control the
Fed from manipulating the dollar to benefit their narrow interests. But in so
doing, we benefit everyone on earth. It’s like the Golden Rule, by which you
do unto others as you would have them do unto you. Now there is something I
know you and I agree upon.